Free Cash Flow Research

  • TTAM

  • Free Cash Flow Reporting

Free cash flow is the cash a company generates through its operations after accounting for capital expenditures on assets. It is important for investors because it avoids the discretionary aspects of standard accounting. At TTAM, we further research different aspects of Free Cash Flow and develop our proprietary investment indicator which historically delivered superior investment return.
  • Cumulative Growth of $10K based on relative Free Cash Flow Strength Quintiles

  • S&P 1500 Universe, 11/30/1998 to 05/31/2019

Source: TrimTabs Asset Management, FactSet, S&P Global

Free Cash Flow Strength is a proprietary indicator developed by TrimTabs Asset Management to measures a company's free cash flow conditions. The hypothetical portfolios are constructed in an equally weighted, monthly rebalanced approach. They do not represent actual fund or portfolio performance. Past performance does not guarantee future returns.

Although the pervasive and intuitive notion is that high-quality companies should have better overall performance than low-quality companies, their differentiating characteristics are hotly debated. Practitioners and academics alike often simply relate quality to some measure of profitability, capital structure, or quality of earning, but our research shows that Free Cash Flow is the key to define quality and historically outperformed the other “quality” factors.
  • Top-Bottom Quality Factor Performance Spread

  • S&P 1500 Universe, 11/30/1998 to 05/31/2019

Source: TrimTabs Asset Management, FactSet, S&P Global,

Free Cash Flow Strength is a proprietary indicator developed by TrimTabs Asset Management to measures a company's free cash flow conditions. Return on Assets, Gross Margin, Debt to Equity are calculated with trailing twelve-month data. Earnings persistence is the trailing three-year earning volatility. Asset Turnover is the year over year growth in asset turnover. The top/Bottom portfolios are constructed by equally weighted top/bottom 50% stocks ranked by factor exposure on a monthly rebalance approach. They do not represent actual fund or portfolio performance. Past performance does not guarantee future returns

Sector allocation is a key consideration in building an investment model. Many of the investment strategies, however, result in over concertation on specific sectors, making the performance inconsistent and unintentionally increase exposure to industry-specific risks. We carefully examine the performance of Free Cash Flow-based investing on a sector-neutral basis and found that the outperformance is widely spread across the different sector. The excess return of Free Cash Flow-based investing is not a result of sector concentration.
  • Annualized Return of Sector Portfolios with High Free Cash Flow Strength Exposure

  • S&P 1500 Universe, 11/30/1998 to 05/31/2019

Source: TrimTabs Asset Management, FactSet,

S&P Global Free Cash Flow Strength is a proprietary indicator developed by TrimTabs Asset Management to measures a company's free cash flow conditions. High Free Cash Flow Strength is the portfolio with the top 50% stocks in each sector. Benchmark is the equally weighted portfolio for each sector. For sector classification please refer to FactSet RBICS sector classification system. The hypothetical portfolios are constructed in a monthly rebalanced approach. They do not represent actual fund or portfolio performance. Past performance does not guarantee future returns

Beyond the US market, we extended our research to the global equity universe. We found that Free Cash Flow-based investing historically produced excess return against the average stock return across different equity markets. The research capability on global equity market builds a solid foundation for our mission: Provide investors with Free Cash Flow-based investment products and services to fulfill their long-term investment success.
  • Annualized Return of Market Portfolios with High Free Cash Flow Strength Exposure

  • Global Equity Market, 11/30/1998 to 05/31/2019

Source: TrimTabs Asset Management, FactSet

Free Cash Flow Strength is a proprietary indicator developed by TrimTabs Asset Management to measures a company's free cash flow conditions. Stocks with high free cash flow exposure are defined as stocks in the top 50% based on the free cash flow factor ranking in each country/region. The excess return is calculated by subtracting the average annual return of all stocks by the average annual return of stocks high free cash flow factor exposure. Past performance does not guarantee future returns.

Why Free Cash Flow

The fund’s investment objectives, risks, charges and expenses must be considered carefully before investing. The prospectus contains this and other important information about the investment company, and it may be obtained by calling 18006170004. Read it carefully before investing.

Fund holdings and/or sector allocations are subject to change at any time and are not recommendations to buy or sell any security. www.trimtabsfunds.com/ttac

Investing involves risk. Principal loss is possible. There is no guarantee that TTAC will achieve its investment objective. Investing involves risk, including the possible loss of principal. Because the Fund is an ETF (rather than a mutual fund), shares are bought and sold at market price (not NAV), may trade at a discount or premium to NAV, and are not individually redeemable. Owners of the shares may acquire those shares from the Fund and tender those shares for redemption to the Fund in Creation Unit aggregations only, consisting of 25,000 shares. Brokerage commissions will reduce returns. Investments in the Fund include risks associated with small and midcap securities, which involve limited liquidity and greater volatility than largecap securities. Past performance does not guarantee future results. To obtain fund performance call 212-217-2514 or visit www.trimtabsfunds.com.

The TrimTabs All Cap US Free‐Cash‐Flow ETF is distributed by Quasar Distributors, LLC

Alpha is a measure of performance on a risk-adjusted basis.

Standard deviation is a measure that is used to quantify the amount of variation or dispersion of a set of data values.

Downside deviation is a measure of downside risk that focuses on returns that fall below a minimum threshold or minimum acceptable return (MAR).

Max drawdown is an indicator of the risk of a portfolio chosen based on a certain strategy.

The S&P Composite 1500 combines three leading indices, the S&P 500, the S&P MidCap 400, and the S&P SmallCap 600 to cover approximately 90% of the U.S.

Global Equity Market – An equity market is a market in which shares are issued and traded, either through exchanges or over-the-counter markets.

Index performance is not indicative of fund performance. Past performance does not guarantee future returns.